T-bills market - no man's land?

A regulated T-bill market, that is a several million-dollar market, from which securities companies would stand to gain as much as the banks, is starting to stir unrest.

The Finance Ministry, which had announced the launch of the T-bills market ever since February, is now putting the blame for the operating regulation of this market not being sent to the Official Gazette on the National Securities Commission (CNVM) and NBR.

Enache Jiru, head of the State’s Treasury says that the final draft of the document was actually sent to the NBR and CNVM and all it needs to be published is some formal signatures.

At the same time, a CNVM official told Ziarul Financiar that the commission two weeks ago “got its hands” on the regulation draft, after having learnt about it from the press. “There was no co-operation between us and the Finance Ministry,” the CNVM official said.

Enache Jiru explains that the most important stipulation in the draft is the “expansion of the broker area” by including the securities companies as dealers on the T-bills market, a position which is currently the monopoly of the banks.

Operating on the market is conditioned by meeting certain selection criteria. The primary dealers are required to have a capital reaching at least one third of the minimal one of the banks, that is 50bn lei. Only the brokerage companies of the leading foreign banks meet the criteria at present.

The Finance Ministry feels that T-bills due in less than one year must not be traded on the Stock Exchange, as they are to be listed on an OTC type of market, where transactions are not performed in the floor.

At the same time, the draft stipulates that the public securities maturing in over one year will be “allowed” for trading on the Stock Exchange, without making a specific reference in this regard.

CNVM does not share this point of view and claims the T-bills maturing in less than one year should be traded on both the Stock Exchange and on the interbank market, while those maturing in more than one year should be traded solely on the Stock Exchange.